Suppose that the wheat market in Ghana is a perfectly
competitive one where all the firms are identical with identical
cost curves. Again, suppose that a single firm’s total cost (TC)
function is given as TC = 100 + q2 + q where q is the quantity of
output produced by the firm. Furthermore, the market demand
function for this product is given by the equation Q = 500 – 0.5P,
where Q is the market quantity demanded. Also, the market supply
function is given by the equation q = -100 + P.
You are required to provide answers to the following
questions:
(a) Calculate the equilibrium quantity and
price in this market given the above information?
(b) Determine the
firm’s,
i. profit maximising level of
production, 6 marks
ii. profit at this market
equilibrium.
v. Is this a short-run or long-run equilibrium? Explain your
answer.
(c) Given your answer to question (b, iv.
and v.), what do you anticipate will happen in this market in the
long-run?
(d) Determine the long-run equilibrium
price and the long-run equilibrium quantity for a single firm in
the market. Explain your
answer.
(e) Given your answer to question (d), how
many units of this good are produced in this market?
In: Economics
1)If spot rates are 3.1% for one year, 3.5% for two years, and 3.8% for three years and 4.0% for four years, the price of a $100 face value, 4-year, annual-pay bond with a coupon rate of 5% is equal to:
2)
The following spot and forward rates are provided:
Current 1-year spot rate is 5.5%.
One-year forward rate one year from today is 6.63%.
One-year forward rate two years from today is 8.18%.
The value of a 3-year, 6% annual-pay, $100 par value bond is equal to:
3)The 3-year spot rate is 8.75%, and the 2-year spot rate is 8.65%. What is the 1- year forward rate two years from today
4)
|
Bond |
Coupon Rate |
Maturity (years) |
|
A |
6% |
9 |
|
B |
6% |
6 |
|
C |
8% |
6 |
All three bonds are currently trading at par value.
Which bond will most likely experience the greatest percentage change in price and which one most likely experience the lowest percentage change if the market discount rates for all three bonds increase by 1%? Provide explanations.
In: Finance
Mr. Lowry wants to appraise the value of his home by the Direct Market Comparison Approach. The following information has been gathered about three recent sales in his neighbourhood..
|
Subject Property |
Sale #1 |
Sale #2 |
Sale #3 |
|
|
Sale Price |
$875,000 |
$820,000 |
$779,000 |
|
|
Sale Time |
Recent |
3 months ago |
3 months ago |
|
|
Lot Size |
50’ x 110’ |
55’ x 100’ |
55’ x 110’ |
45’x 105’ |
|
House Size |
3,000 s.f. |
3200 s.f. |
3,000 s.f. |
3000 s.f. |
|
Washrooms |
3 |
2 |
3 |
1 |
|
Fireplace |
Yes |
Yes |
No |
Yes |
|
Finished Rec Room |
Yes |
No |
No |
Yes |
|
Walkout basement |
No |
Yes |
Yes |
Yes |
|
Air Conditioning |
Yes |
Yes |
No |
No |
Other Information of Mr. Lowry’s property is given as follows;
Projected price increase per
month
2%
Projected increase
started
6 months
Land value per frontage
foot
$3,500
Space cost per foot
($1,000/100)
$10.00
Air
conditioning
$4,000
Fireplace
$5,500
Finished recreation
room
$10,800
Washroom $8,000
Walkout basement $10,000
Required: Estimate the appraised value of Mr. Lowry’s home.
In: Finance
Gladstone Corporation is about to launch a new product. Depending on the success of the new product, Gladstone may have one of four values next year:
$ 146 million,$ 130 million,$ 91million, and $ 79million. These outcomes are all equally likely, and this risk is diversifiable. Suppose the risk-free interest rate is 5 % and that, in the event of default, 24 %of the value of Gladstone's assets will be lost to bankruptcy costs. (Ignore all other market imperfections, such as taxes.)
a. What is the initial value of Gladstone's equity without leverage?
Now suppose Gladstone has zero-coupon debt with a $ 100 million face value due next year.
b. What is the initial value of Gladstone's debt?
c. What is the yield-to-maturity of the debt? What is its expected return?
d. What is the initial value of Gladstone's equity? What is Gladstone's total value with leverage?
Suppose Gladstone has 10 million shares outstanding and no debt at the start of the year.
e. If Gladstone does not issue debt, what is its share price?
f. If Gladstone issues debt of $ 100 million due next year and uses the proceeds to repurchase shares, what will its share price be? Why does your answer differ from that in part (e)?
In: Finance
37. Mavis Corporation has an agreement with its workers to index completely the wage of its employees to the CPI. Mavis currently pays its production line workers $7.50 an hour and is scheduled to index their wages today. If the CPI is currently about 130 and was 120 a year ago, Mavis should increase the hourly wages of its workers by about...
38. Thomas earned a salary of $50,000 in 2001 and $70,000 in 2006. The consumer price index was 177 for 2001 and 265.5 for 2006. Thomas’s 2001 salary in 2006 dollars is...
39. Suppose the CPI was 95 in 1955, and suppose currently the CPI is 475. According to the CPI, $100 today purchases the same amount of goods and services as...
40. Suppose that twenty-five years ago a country had nominal GDP of $1,000, a GDP deflator of 200, and a population of 100. Today it has nominal GDP of $3,000, a GDP deflator of 400, and population of 150. What happened to the real GDP per person?
41. Assume the consumer price index was 225 in 2006 and 234 in 2007. The nominal interest rate during this period was 6.5 percent. What was the real interest rate during this period?
Please show work. Thank you
In: Economics
SOLVE USING R. COPY AND PASTE R INPUT AND OUTPUT.
Fifteen turkey hens were randomly assigned to three groups of five. One group was given diet A, the second group diet B, and the third group diet C. We wish to know if there is a difference in the weight of eggs produced by the birds on these diets, and if so, which diet results in the largest eggs. The data are the mean weights of ten eggs from each bird. Check the normality and homogeneity assumptions first to see if you can use ANOVA.
Diet A 124 118 120 127 115
Diet B 98 100 95 102 105
Diet C 116 97 100 89 98
(a) Create a data frame called turkey where the first column is the Diet and the second column is the EggWeights.
(b) Test the normality assumption by running the Shapiro-Wilk Normality Test
shapiro.test(turkey.mod$residuals)
Is the normality assumption violated? Explain.
(c) Test the homogeneity assumption by running the Bartlett
Test
bartlett.test(EggWeights ~ Diet, data=turkey)
Is the homogeneity assumption violated? Explain.
(d) Run an appropriate test (ANOVA or Kruskal-Wallis test, whichever is most appro- priate) to test your appropriate null hypothesis. (Note: make sure you explicitly state what the null hypothesis is before running your anova and make sure that you explicitly state your conclusions with explanation!).
In: Statistics and Probability
After several months of planning, Denise Murphy started a property management business for
the for the properties that its owners invest called ABC Property Management (“ABC”). The
following events occurred during its first month:
On May 1, Murphy started the firm, investing $3,000 cash and $15,000 of equipment.
On May 2, ABC paid $600 cash for furniture for the shop.
On May 3, ABC paid $500 cash to rent space in a strip mall for May.
On May 4, ABC purchased $1,200 of equipment on credit for the shop (using a long-term note payable).
On May 5, ABC opened for business. Cash received from services provided in the first week and a half of business (ended May 15) is $825.
On May 15, it provided $100 of property management services on account (invoiced).
On May 17, it received a $100 check for services previously rendered on account.
On May 17, it paid $125 to an assistant for work during the store opening.
Cash received from services provided during the second half of May is $930.
On May 31, it paid a $400 instalment toward principal on the note payable entered into on May 4.
On May 31, it paid $900 cash dividends to Murphy.
Set-up T-accounts for each of the accounts and post the journal entries completed in Homework 1 to those T-accounts.
Prepare a simplified balance sheet and income statement.
In: Accounting
On April 30, First Blade receives its bank statement. The bank
statement balance of cash as of April 30 is $3,490. The company
deposits its receipts in the bank and makes all payments by check.
There is a $110 debit memo on the bank statement. This is for an
NSF check written by one of the company’s customers, R. Jacobs for
$100 plus a bank fee of $10. The April 29th deposit for $154 was
recorded in the company’s cash account for $145. There is a $1000
credit memo on the bank statement. This is for a note receivable
collected by the bank on behalf of the company. The note is for
customer A. Tolbert and is $900 principle plus $100 of interest. On
the same day, the bank withdrew $40 from the company’s account as a
fee for collecting the note receivable. There are two other debit
memos on the bank statement, the first for $35 for a bank service
charge on April 30 and the second for $80 for a check printing
charge on April 20. On April 30 the bank credited the company’s
account for $8 for interest earned. The Ledger balance of cash as
of April 30 is $967. Outstanding checks as of April 30 are number
1945 for $3,021 and number 1487 for $200. The accountant notes that
the deposit made on April 30 for $1,450 does not appear on the bank
statement. I
Instructions:
1. Complete the bank reconciliation as of April 30 using the
information above.
2. Prepare the necessary journal entries that affected the ledger
balance of cash.
In: Accounting
| A manufacturer receives parts from two suppliers. An SRS of 400 parts from supplier 1 finds 20 defective; an SRS of 100 parts from supplier 2 finds 10 defective. Let p1 and p2 be the proportion of all parts from suppliers 1 and 2, respectively, that are defective. Is there evidence of a difference in the proportion of defective parts produced by the two suppliers? To make this determination, you test the hypotheses H0 : p1 = p2 and Ha : p1 ≠ p2. The P-value of your test is | |||||||
|
| A bank wants to get new customers for their credit card. They try two different approaches in their marketing campaign. The first promises a "cash back" reward; the second promises low interest rates. A sample of 500 people is mailed the first brochure; of these, 100 get the credit card. A separate sample of 500 people is mailed the second brochure; 125 get the credit card. Is there evidence of a difference in the two campaigns? Find the test statistic. | |||||||
|
| A poll finds that 54% of the 600 people polled favor the incumbent. Shortly after the poll is taken, it is disclosed that the incumbent had an extramarital affair. A new poll finds that 50% of the 1030 polled now favor the incumbent. We want to know if his support has decreased. The test statistic is | |||||||
|
In: Statistics and Probability
Use the definition of incidence taught in class, and answer the following questions. Be sure to show your work.
1. Spring fever! Epidemiologists and teachers alike have noticed the cyclic occurrence of the dreaded spring fever. Students afflicted with this disease exhibit certain listlessness in class. And they seem to stare out the windows with remarkable tenacity. Why, it’s almost as if the trees growing outside are more interesting than doing algebra. (Gasp!)
At Metropolitan High School, teachers have been monitoring the situation and diagnosing spring fever. Their observations began with week 0, the first week of May. The teacher’s data are shown in the following table:
Spring Fever Cases: Raw Data
|
Week |
Newly Diagnosed with SF |
No SF Diagnosed |
IR |
IR/100 |
|
0 |
0 |
1,025 |
||
|
1 |
105 |
920 |
||
|
2 |
180 |
740 |
||
|
3 |
390 |
350 |
||
|
4 |
325 |
25 |
a. For weeks 1-4, calculate the incidence rates, and express them as decimals.
b. From your data above, convert the incident rates to rates per 100 and fill in the table with your answers. (Note that week 1 is the first row of changes where calculations should be made.)
Consider the incidence rates you have calculated. Based on these data, when should teachers expect the greatest increases in spring fever?
In: Statistics and Probability